A dvantages of C ompany over Partnership

A corporation is owned by shareholders, who profit from the company's gains. A

partnership is owned by two or more people who divide the business' profits. The people that
are run the company have the same goal which is to have the profit and they will divide the
profit of company based on their share and usually person that hold the biggest share in the
company will hold the highest position in the company. The partnership also has run the same
character but the different is the protection of liability. There are several advantages of
company compare to the partnership such as limited liability, permanency and transferability
of ownership.
The first advantages of company over partnership are the limited liability. The
companies have the limited liability compare to the partnership. Owner liability is limited to
the loss of the value of shares held. Owners entire wealth is not in jeopardy if the corporation
goes bankrupt or ceases operation. The most an owner can lose is the value of the investment
from buying shares of the corporation. The owners of partnerships can lose more than just the
value of the business and their entire wealth is on the line. Furthermore the company are
applied to the company act 1965 which is the loss of the owner only based on the share that
they held in the company and it will not disturb any owner personal wealth.
Second advantages of the company compare to partnership are permanency. When
owners die, shares of the corporation can be willed to family members or other entities just
like any other asset. A corporation can theoretically live forever as long as it remains
profitable. By having this element the will continue to run and still can make the profit
compare partnership the need to be dissolve if any one of the partner are died of holding back
from the partnership. This because the partnership need the legal representation and need to
make a new contract if they want to run all over the business again.
The last advantages of company compare to the partnership are the transferability of

ownership. Selling ownership of a corporation is simply a matter of selling shares to a buyer

willing to pay the price of the shares and the share also can be inherited from the family or the
owner to the other person. Selling a partnership is a far more involved process which usually
necessitates legal representation, contracts, and valuation procedures. For an example the
shareholder of the company can sell their share to other person if they are not interested to
continue involve in the company.